Whistleblower Witness Clashes with Former Boss’s Defense Lawyers

The defense in the “hustle” trial for former Countrywide executive Rebecca Mairone tried to paint a government whistleblower as a jealous rival who turned in his former supervisor out of jealousy.

Ed O’Donnell, former head of underwriting at Countrywide, was confronted Tuesday with an email he wrote to a colleague, saying Ms. Mairone has “got rubber bullets in her gun and we’re going nuclear.” Mr. O’Donnell, the government’s star witness, wrapped up his testimony Tuesday. The trial is expected to run for about another month.

Mr. O’Donnell, who could reap as much as $1.6 million if the government is successful in proving its case, has testified that Countrywide, which was bought by Bank of America in 2008, systematically weakened its quality of loans in favor of speed as part of a program internally called the “hustle” that ran from mid-August 2007 until May, 2008. The government has alleged that the company committed fraud by selling the loans to Fannie Mae and Freddie Mac and misleading the mortgage finance firms about their quality.

Ms. Mairone, who is currently an executive at J.P. Morgan Chase & Co., served as the chief operating officer of the unit that ran subprime lending for Countrywide at the time of the hustle program. In late 2007, when the market for subprime loans was crashing, Ms. Mairone led the unit’s efforts to switch to prime loans, or loans to borrowers who were determined to be low risk and had high credit ratings.

The government has tried to paint Ms. Mairone as the leader of the efforts to degrade quality in favor of speed. The government showed the jury emails in which Ms. Mairone asked Mr. O’Donnell, the head of underwriting, only to send information about a degradation in the quality of loans to her. They also tried to show that Ms. Mairone continually ignored Mr. O’Donnell, and other colleagues warnings about how the hustle program was leading to defective loans.

The defense for Bank of America and Ms. Mairone have countered by trying to paint Mr. O’Donnell as a jealous rival. Mr. O’Donnell at one point was interviewed for a position directly under Ms. Mairone. Mr. O’Donnell testified that he believed the position was essentially the job he already had, and was surprised when Ms. Mairone picked someone else for the position.

In earlier testimony by Michael Thomas, who worked for Mr. O’Donnell, the defense had the witness read an email in which he wrote to Mr. O’Donnell that “It gave me comfort just to know I got under her skin just a little :&gt;,” after a meeting with Ms. Mairone.

In opening arguments, Ms. Mairone’s attorney, Marc Mukasey of the law firm Bracewell & Giuliani LLP, said she joined Countrywide to oversee “a group of guys who had worked in the industry for years.” He told the jury that the witnesses “hold a grudge and are picking on an easy target, the new girl.”